How's this deal in Baytown, Texas (near Houston)?

[Sandeep S.]

I am in contract for this REO property: 8119 Eastpoint Blvd, Baytown, TX 77521 for $110k. I expect that rehab will take another $10k (max).

It is a 2005 built, 4 BR, 2500 sq ft home in decent school district. I am assuming rent of ~$1500. As such I am going to hold it as rental - I think the ARV (should I flip) is ~$155k. Even for rentals - I always want to make sure there is enough room for flip (to qualify it as a good deal).

This will be my 2nd acquisition in Houston area (note that I am in California) and I am hoping that it is better than the first deal I am closing today (23527 Hidden Maple Dr, Spring, TX)

Thoughts on my numbers and quality of deal?

[Sandeep S.]

I just wanted to update this thread with what happened to my purchase of the property. I did a lot of comps and analysis and was convinced that I would get $1400 rent as worst case. And given that I was just starting out in Houston (this was 2nd property for me) - I went ahead with the purchase. The bank took 2 months to sort out some title issues and the property closed in late March. I also got to finally see the property during my trip to Houston in early April!

The rehab came to just about $10K as budgeted. And the place got rented within a week at my asking price of $1500 (actually $1495)!

It may not be the best of the deals - but it met my expectations and fits well in my strategy. Being out-of-state, compared to the alternative of buying turnkey, I feel much better creating my portfolio this way. There are some additional risks, but rewards make it worth the risk.